USD/JPY Forecast – US Dollar Plunges Against the Yen

USD/JPY Forecast Video for 14.03.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has shown a bit of negativity during the trading session on Monday, as we continue to see a lot of back and forth in the US dollar/Japanese Yen pair. Ultimately, this is a market that continues to see a lot of external pressures, not the least of which of course would be the Bank of Japan. After all, the Bank of Japan is going to continue to fight interest rates rising in the 10 year yield, so that of course puts negative pressure on the Japanese yen over the longer term as they have to print more currency.

The 50-Day EMA and the 200-Day EMA both are sitting right around the middle of the candlestick, but at this point in time they are both relatively flat, so I don’t know how much that is going to mean. The market will continue to see a lot of noisy behavior, but ultimately, I still think you have to keep an eye on the interest rate market, especially as the 50 basis points level was so vehemently defended. If you pay close attention to the 10 year yield in Japan, anytime we get closer to the 50 basis points, then it means that the Japanese Yen should start to sell off yet again. On the other hand, if interest rates continue to drop off like it did during the day on Monday, then we will continue to see the Japanese yen pick up a little bit of strength.

You also have to pay attention to the Federal Reserve, and whether or not it sounds like it is going to continue to be very tight and squash speculation. The market then could see US dollar strength in that case. That being said, the market did gap lower to kick off the session, so that suggest that we do have plenty of negativity. Ultimately, the market could drop down toward the ¥130 level, assuming that we continue to see interest rates fall around the world. On the other hand, if interest rates start to pick back up, then it means that the US dollar should continue to go higher.

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